>> probably destined to be the most important tech IPO since Google <<

Just looking at 2005, BOT and BIDU will be tough for FB to beat in importance or in value for public investors. BOT popped to more than $130 within 3 days of its October 2005 IPO and was eventually bought by CME. I consider that a technology company.

And BIDU IPO'ed at $29 per ADS ($2.90 adjusted). Without Baidu Google may have dominated search in China.

There are probably some contenders for 2006-2011. VMWare is one. And First Solar for signaling a blowoff that didn't end until it ran to > $300.

Facebook's IPO is a liquidity event forced upon the company by it exceeding 500 shareholders.

The influential proxy adviser took aim at Facebook’s dual-class stock structure in a research note published on Monday, deriding it as an unfair system to regular shareholders — one that could be extremely painful to unwind down the road.

By creating multiple classes of stock — in Facebook’s case, A and B shares, with the latter carrying 10 times more voting power — the social-networking titan is following the path set by LinkedIn, Groupon and Zynga. As the Deal Professor and others have noted, however, a number of unusual arrangements give the company’s chief executive and co-founder, Mark Zuckerberg, control of about 57.1 percent of the company’s voting power.

It’s little surprise that I.S.S., long a critic of dual-class shares, is against Facebook’s proposed system. Let’s count the ways the shareholder adviser denigrates the framework in Monday’s note:

“This is a governance profile with a defense against everything against hubris.”

I.S.S. later refers to “governance structures which diminish shareholder rights and board accountability.”

I.S.S. also calls it “an autocratic model of governance.”

In what seems like the equivalent to I.S.S. of adding insult to injury, Facebook also plans to adopt a staggered board, one where only some board members are up for election every years, and a provision that prevents shareholders from complaining about their lesser voting rights.

But the proxy adviser also notes that, should Facebook want to dismantle its dual-class system, such a move could be difficult. I.S.S. details the issues that Benihana, Telephone & Data Systems and Magna International suffered in even partially streamlining their shares. Among the consequences was internecine warfare between different shareholder classes, which led to at least short-term pain for investors.

Ultimately, however, Facebook shareholders face what I.S.S. calls a “Hobson’s choice” at the moment. They can become second-class shareholders with relatively few protections or miss out on one of the most eagerly awaited I.P.O.’s of the decade.

GlennDo you have a timeline of funding for facebook? I heard they got $500,000 for 10% early on to give an initial valuation of $5M but I don't know much beyond that. It would be nice to have that in the title page, if we could find it.

Peter Thiel reportedly invested $500,000 in Facebook at a $4.8 million valuation. An alternative version of the story has him lending $700,000 to Mark Zuckerberg and eventually converting it into a 7.5% position in Facebook. Regardless of which version is correct, at the time of the S-1 filing he owned a 2.5% position. Not a bad return.

I have yet to find a clean valuation time line. This one is not bad:

Another from November 2010:

May 2005: Facebook raises $12.7 million in venture capital from Accel Partners, at a rumored valuation of $100 million.

April 2006: Facebook raises $27.5 million from Greylock Partners and Meritech Capital, for a reported$525 million pre-money valuation.

October 2007: Microsoft invests $240 million for a 1.6% stake in Facebook, valuing the company at $15 billion.

May 2009: Digital Sky Technologies invests $200 million for a 1.96% stake, bringing Facebook's value to $10 billion, a drop of more than $5 billion from Microsoft's investment.

January 2010: Offers to buy Facebook's private company stock on SecondMarket place Facebook's valuation at $14 billion.

June 2010: A report by Elevation Partners pegged Facebook's value at $23 billion.

July 2010: A report by Next Up Research pegged Facebook's value at $12 billion.

August 2010: Shareholder trading values Facebook at more than $33 billion.

Feb. 17 (Bloomberg) -- Last April, Gamestop Corp. opened a store on Facebook to generate sales among the 3.5 million-plus customers who’d declared themselves “fans” of the video game retailer. Six months later, the store was quietly shuttered.

Gamestop has company. Over the past year, Gap Inc., J.C. Penney Co. and Nordstrom Inc. have all opened and closed storefronts on Facebook Inc.’s social networking site.

Facebook, which this month filed for an initial public offering, has sought to be a top shopping destination for its 845 million members. The stores’ quick failure shows that the Menlo Park, California-based social network doesn’t drive commerce and casts doubt on its value for retailers, said Sucharita Mulpuru, an analyst at Forrester Research in Cambridge, Massachusetts.

“There was a lot of anticipation that Facebook would turn into a new destination, a store, a place where people would shop,” Mulpuru said in a telephone interview. “But it was like trying to sell stuff to people while they’re hanging out with their friends at the bar.”

A year ago, investors hailed so-called F-commerce as the next big thing, speculating that the company had potential to threaten Amazon.com Inc. and PayPal Inc. Facebook is the most- visited website in the world. Some people thought that persuading visitors to shop would be easy, Mulpuru said.

David Fisch, Facebook’s director of business development, said in June that the site would be more appealing than competitors because it could replicate the social experience of a brick-and-mortar shopping mall.

Hanging Out

“This is where people are hanging out,” Fisch said at the Internet Retailer Conference & Exhibition in San Diego.

Facebook planned to profit from retailers buying ads to drive traffic to their on-site stores. Business consultant Booz & Co. predicted in January 2011 that physical goods sold through social commerce would balloon to $30 billion from $5 billion by 2015, with Facebook contributing a majority of sales.

Even as some businesses shut storefronts, many companies continue to devote advertising dollars to the social network. Facebook’s sales surged 55 percent to $1.13 billion in the fourth quarter. The company aims to use e-commerce more as a way of getting users to stay longer than as a way to boost revenue, said Krista Garcia, an analyst at EMarketer Inc. in New York.

Chris Kraeuter, a Facebook spokesman, declined to comment.

Customers had no incentive to shop at Gamestop’s Facebook store rather than the company’s regular website because purchasing online is already convenient, said Ashley Sheetz, who is the Grapevine, Texas-based company’s vice president of marketing and strategy.

Shut Quickly

“We just didn’t get the return on investment we needed from the Facebook market, so we shut it down pretty quickly,” Sheetz said in a telephone interview. “For us, it’s been a way we communicate with customers on deals, not a place to sell.”

Gap, which has 5.6 million Facebook fans from its namesake, Banana Republic and Old Navy pages, opened and discontinued a storefront last year, said Liz Nunan, a company spokeswoman. The San Francisco-based company also discovered customers preferred shopping on its own sites, she said.

“We will continue to evaluate if this is something we want to bring back in the future,” Nunan said in an emailed statement.

Nordstrom tested ways to make shopping “seamless through Facebook” and decided on a broader social media focus, Colin Johnson, a spokesman, said.

J.C. Penney featured assortments in a Facebook “shop” tab beginning in 2010, and took it down in December 2011, Kate Coultas, a spokeswoman said in an emailed statement.

Cracks in Model

Wade Gerten, chief executive officer of social media developer 8thBridge, previously known as Alvenda, opened a Facebook store for the florist 1-800-FLOWERS. Minneapolis-based Gerten went on to develop commerce strategies for Delta Air Lines Inc., Diane Von Furstenberg Studio LP and denim-maker Seven for all Mankind.

Cracks in the model showed quickly, Gerten said in a telephone interview. Clients “have taken a different approach,” shutting stores or scaling back their offerings.

“It was basically just another place to shop for all the stuff already available on the retailer websites,” Gerten said. “I give so-called F-commerce an ‘F.’”

Still open. From the S-1: Paul D. Ceglia filed suit against us and Mark Zuckerberg on or about June 30, 2010, in the Supreme Court of the State of New York for the County of Allegheny claiming substantial ownership of our company based on a purported contract between Mr. Ceglia and Mr. Zuckerberg allegedly entered into in April 2003. We removed the case to the U.S. District Court for the Western District of New York, where the case is now pending. In his first amended complaint, filed on April 11, 2011, Mr. Ceglia revised his claims to include an alleged partnership with Mr. Zuckerberg, he revised his claims for relief to seek a substantial share of Mr. Zuckerberg’s ownership in us, and he included quotations from supposed emails that he claims to have exchanged with Mr. Zuckerberg in 2003 and 2004. On June 2, 2011, we filed a motion for expedited discovery based on evidence we submitted to the court showing that the alleged contract and emails upon which Mr. Ceglia bases his complaint are fraudulent. On July 1, 2011, the court granted our motion and ordered Mr. Ceglia to produce, among other things, all hard copy and electronic versions of the purported contract and emails. On January 10, 2012, the court granted our request for sanctions against Mr. Ceglia for his delay in compliance with that order. We continue to believe that Mr. Ceglia is attempting to perpetrate a fraud on the court and we intend to continue to defend the case vigorously.

Facebook's lawyers are asking a judge to order Paul Ceglia to foot the bill for more than $84,000 in fees.

Ceglia, the New York man who claims he's entitled to half of Mark Zuckerberg's multibillion-dollar stake in Facebook, was fined for refusing to turn over email account information and ordered to pay reasonable attorneys' fees.

Facebook's lawyers are also asking Leslie G. Foschio, the federal magistrate in Buffalo, N.Y., to order Ceglia not to file any additional "non-responsive papers or pleadings in the case" until he pays up.

Ceglia's lawyer, Dean Boland, said he has not had a chance to review the court filing in detail, but said he and his client would prepare a response over the coming week.

"If we feel it ought to be modified, we will respond accordingly," Boland said.

Boland, who's from Cleveland, took a shot at Facebook's lawyers for charging Manhattan hourly rates in a case unfolding in Buffalo.

"Cleveland and Buffalo are pretty identical demographically, and I can tell you that no lawyer would survive in the city of Cleveland charging that much an hour because no one would be able to hire him," Boland said.

Orin Snyder, the most senior Gibson Dunn partner, charged $716.25 an hour. His most junior associate charged $337.50 an hour, according to the filing.

Facebook, which is on the verge of an initial public offering that could value the world's most popular social networking company at $100 billion, can clearly afford it.